ASEAN KEY DESTINATIONS
Singapore: Central warns of more downside risks
Singapore's central bank said it is closely monitoring financial markets in the wake of the crisis surrounding US mortgage giants Fannie Mae and Freddie Mac, and warned of big downside risks in global markets, reported Reuters.
"Significant challenges and downside risks in the international financial markets remain and financial institutions and investors should stay vigilant," the Monetary Authority of Singapore (MAS) said on Monday.
"The direct impact of the credit crisis on financial markets and financial institutions in Singapore has been relatively modest so far," the central bank said.
Singapore's Straits Times stock market index .FTSTI has fallen 16 percent this year. The country's three banks have suffered relatively modest writedowns on their debt investments as a result of the credit crunch.
The US Treasury and Federal Reserve called on Sunday for sweeping measures to lend money and buy equity, if necessary, in Fannie Mae and Freddie Mac, which own or guarantee $5 trillion in debt - close to half the value of all US mortgages.
The US government plan to bolster the government-sponsored mortgage financiers helped calm markets on Monday, but did little to allay fears about the health of the US financial system.
The MAS declined to comment on whether any of Singapore's foreign reserves are invested in debt from Fannie and Freddie. Singapore had about $177 billion in its foreign reserves as of the end of June.
Foreign central banks, mostly in Asia, hold $979 billion of the $5 trillion bonds and mortgage-backed bonds sold by Freddie and Fannie.
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